Investor Presentation Advanced Info Service Plc. November 2019 - - PowerPoint PPT Presentation

Investor Presentation

Advanced Info Service Plc. November 2019

Ticker: ADVANC (SET) AVIFY (ADR)

Add AIS IR LINE@

AIS: Digital Life Service Provider

2

Enterprise FBB Mobile Enterprise FBB Digital

Medium to long term

Strengthen the Core

Maintain leadership in core mobile business while optimizing and digitizing to preserve strong cash flow generation

Expand New Growth Engine

Expand revenue and profit stream from Fixed Broadband and Enterprise Business while serving to strengthen and leverage from the core mobile business

Build New Digital Businesses

Build new digital platforms to serve future customer’s lifestyle and create new way of customer engagement through partnership models

• Insurance
• Game
• Advertising

Mobile money Video Cloud Other partners’ services IoT

Cover 57 key cities out of 77 provinces Cover 7mn home-pass out of 22m households in Thailand

5th year of operation 9% market share 937K subscribers

Fibre to home internet

48% market share 41.6mn subscribers

Nationwide 4G/3G/2G mobile network >98% coverage >98% Mobile network coverage

86% 10% 4%

3

• Offer Fixed-Mobile Convergence (FMC)
• Enhance sales effectiveness
• 1mn subscriber target by end-2019 with

quality acquisition

• Maintain leadership in network quality
• Continue strengthening brand perception
• Focus on Customer Value Management

(CVM)

9M19 performance FY19 Guidance

Mid-single digit growth

EBITDA margin Stable from last year

Core service revenue

+5.2%

YoY

Normalized EBITDA margin

• Gain share in EDS (Enterprise data service)
• Drive double-digit growth in Cloud/DC/ICT
• Explore IoT in key verticals

Business

44.2%

• Continue operational efficiency & digitization
• Ensure spending effectiveness to compete and retain

quality subscribers

• Invest for 4G leadership and fixed broadband
• Invest in future-proof technology and incorporate 5G

capability in network plan

• Continuously invest in research and development of 5G

use cases to explore new revenue opportunities.

9M19: Robust revenue growth with guidance maintained

CAPEX 20-25bn CAPEX 16bn

4

3Q19 Overview: Mobile saw improvement while FBB continued strong growth

Core service revenue: grew 7.2% YoY driven by improvement in mobile Mobile

• Revenue +6.4% YoY, flat QoQ following postpaid price adjustment
• Postpaid subs gained 208k vs -115k in prepaid with data

consumption of 12.1 GB/month

FBB

• Robust revenue growth of +32% YoY, +6.9% QoQ driven by 81.6k

net addition

• Focused on FMC and maintain 1mn subs target supported by AIS

shops, Telewiz, and AIS Call Center to ensure quality

Digital services

Enterprise:

• Maintained high-single digit growth for FY19, supported by end-

to-end product proposition combined with CSL Consumer:

• Continued building engagement platforms in video, mobile

money, IoT, and partner platforms 17,951 20,656 3Q18 3Q19 42.6%* 45.4%*

+15%

EBITDA and margin: grew 15% YoY supported by revenue growth

(Bt mn)

• +7.2% YoY and +2.6%

QoQ from mobile & FBB expansion

Network OPEX

(excl. TOT)

SG&A

• +6.4% YoY from brand

and -6.2 % QoQ from a

• ne-time for legal

severance in 2Q19 6,934 8,296 3Q18 3Q19

Net profit: continued improving trend

+20% (Bt mn)

• +20% YoY and +0.7% QoQ following

EBITDA expansion, despite rising D&A 30,895 32,880 1,117 1,475 1,122 1,172 33,134 35,527 3Q18 3Q19

Others FBB Mobile +6.4% +32% +4.4 %

+7.2% (Bt mn)

*Show performance after normalizing Bt479mn (before tax) of TOT partnership in 3Q19

Norm. Norm.

5

30.9 32.9 32.9 3Q18 2Q19 3Q19

Mobile: Revenue grew from postpaid price adjustment

Revenue driven by postpaid price adjustment

+6.4% YoY Flat QoQ Mobile revenue (Bt bn)

4G penetration continued uptrend

192 175 354 250 208 360 347

• 32
• 276
• 115

3Q18 4Q18 1Q19 2Q19 3Q19 Prepaid Postpaid

Maintained network quality leadership

4G Penetration on total base

57% 59% 63% 66% 69%

Net subscriber addition (‘000)

• Maintained strong postpaid growth driven by 4G

demand and handset campaigns.

• The decrease in prepaid customers resulted from

customer demand to convert from prepaid to postpaid.

93.4 97.3 9M18 9M19 +4.3% YoY

• AIS awarded Thailand’s Fastest Mobile Network for 5

consecutive years

• The best network performance, tested by

QUALCOMM

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Mobile price plan:

Gearing toward volume-base plans in postpaid; while maintaining competitiveness as well as acquiring targeted segments in prepaid

Monthly Fee (Bt) Total internet Throttled speed Call all networks (mins) Enjoy Free 299 1.5GB 128kbps 100 399 5GB 384kbps 150 499 10GB 200 599 16GB 300 699 20GB 300 899 30GB 400 1,099

Unlimited

• 650

1,299 850 1,599 1,200 1,999 2,000

Postpaid: Full 4G speed

3 months 1 month 3 months 12 months

NEXT G Flexi Speed: The adjustable data package to match your speed needs

Monthly Fee (Bt) Internet 4G/3G

(GB)

Call all networks

(mins)

Speed Adjustment 450 20 200 Full Speed 8 Mbps 4 Mbps 2 Mbps 550 40 750 60 Unlimited First Activation Bt50 Refill at least Bt150 (12m) 750MB/2Mbps 1GB 30d Data 2GB/7d

THE ONE SIM

First Activation Bt50 Refill at least Bt150 (12m) Data 2GB/7d

1Mbps/30d 30d Call rate: Bt0.014/s - Bt1 at first minute

SUPER SOCIAL SIM

Prepaid: SIM2Fly

Required Top-up (Bt) Bundle 399 899 2,799

• Offer various segmented SIMs to cater different needs
• Leverage bundling services to encourage recurring top-up

*Voice call: Bt6/minute for all packages

6GB of data for 8 days in Asia & Australia 6GB of data for 15 days globally 15GB of data for 1 year globally

Prepaid: Main package

7

FBB: Continued both revenue and subscriber momentum

1,117 1,212 1,288 1,380 1,475

3Q18 4Q18 1Q19 2Q19 3Q19

623 677 731 795 855 53 54 65 60 82 677 731 795 855 937

3Q18 4Q18 1Q19 2Q19 3Q19 Beginning subscriber (‘000) Net addition (‘000)

573 574 563 558 549

• Robust revenue growth in 3Q19, focusing on high

value customers acquisition through leveraging mobile subscribers

+32% YoY +6.9% QoQ

Enhanced quality subscriber growth

Fixed broadband revenue (Bt mn) ARPU (Bt/month)

Remained double-digit revenue growth

• Gained 81.6k subscribers in 3Q19, maintaining

1mn subscribers target within 2019 Continued to increase value via FMC and leverage key channels

FMC, 28% Non-FMC, 72%

Of 937k subscribers

• Focus on cross-selling to AIS existing mobile

subscriber base to acquire quality subscribers and enhance ARPA (average revenue per account)

• Enhance sales effectiveness through call center

and Telewiz

• Awarded “The fastest broadband network in

Thailand” by OOKLA

SUPER MESH WIFI Package

999 – 1,099 Bt/mth

Max Speed Internet (Download/Upload)

Launched the new 1Gbps fibre packs

8

• Established an insurance

broker company to be a point

• f online insurance sale
• Comprehensive payment platform

complementing digital life service

Digital service: Expand strategic digital services for both enterprise and consumer

Enterprise: Repositioned to be #1 service provider Strengthened engaging consumer platforms

• Maintained target to achieve high-single digit growth

in FY19 for enterprise segment

• Data-driven marketing through

“THAN” – Advertising for Thais

Insurance Video

1

Mobile money

2 3 5

Advertisement

4

0.8 5.6 Sep-19

Active Registered, but not active

6.5mn

• Stimulate & facilitate Thais’ eSports

with 4 strategies : Connect, Compete, Share, & Educate

2.2mn active users

(Sep-19)

• Complemented by AIS fibre as live

broadcast & on-demand channels

AIS PLAY PLAYBOX WEBSITE

• Leverage on exiting 9 Data centers
• Continue to explore potential IoT in several key areas

Games

NETWORK DC & CLOUD VERTICAL COMMUNICATION DIGITAL MARKETING IOT/M2M PRODUCTIVITY& COLLABORATION MOBILITY SECURITY

• Full range of customized solutions for specific industry

90% 10% Service revenue contribution

Enterprise revenue breakdown

Revenue from enterprise, including mobile airtime, grew to 10% of core service revenue Airtime & EDS 73% Others 27%

Stable

221 62 284 40 65 98 19 37 25 11 19 127 105 17

Assets Liabilities Equity

cash spectrum license

• thers

spectrum license payable interest- bearing debt

• thers

retained earnings

• thers

A/R PPE

B/S

3Q19

9M19 Cash flow Balance Sheet

A/P

Operating cash flow in 9M19 was sufficient to fund both CAPEX, debt repayment, and dividend. Investing cash flow was Bt16bn while FY19 budgeted CAPEX is maintained at Bt20-25bn Average finance costs = 3.1% p.a.

• Maintained investment grade credit ratings
• Fitch: national rating AA+ (THA), outlook stable
• S&P: BBB+, outlook stable

Maintained financial flexibility for future growth

(Bt bn) (Bt bn)

62 6.1 15.8 4.0 1.9 2.0 13.1 21.1 2.1

Operating Investing Financing Net cash

Operating cash flow Income tax paid Cash increased

Repayment of borrowings

Finance cost Cash increase Cash decrease

1.0x 1.6x 0.4x 55%

Net debt to EBITDA Interest bearing debt to Equity Current ratio Return on Equity 9

goodwill

Cash CAPEX

3

Dividend paid Spectrum license Borrowings

1.8 1.8 1.8 1.8 21.7 7.6 7.6 26.6 12.5 9.4 1.8

2020 2021 2022-2025 2026-2029

1800x20MHz license payment 900x10MHz license payment 700x10MHz license payment

10

License payment and debt repayment schedule

900MHz payment term extended

Spectrum license payment schedule Total of Bt83bn toward 2029

(Bt bn)

per year

3.1 3.1

per year

The payment for 900MHz is extended to 2025

Bt97bn

72% 28%

4.0 14.8 13.9 13.4 14.7 12.5 6.0 8.3 9.8 0.8 4Q19 2020 2021 2022 2023 2024 2025 2026 2027 2028 Debt repayment Schedule Total of Bt98bn toward 2028

Float rate Fixed rate

• All in THB currency
• S&P rating: BBB+
• Avg. cost of debt = 3.1% p.a.

(Bt bn)

11

http://advanc-th.listedcompany.com/article_20191009.html

Get to know 5G

12 Enhanced Mobile Broadband

(20 Gbps)

Massive IOT

(1M device per sqr.km.)

Ultra High Reliable & Low Latency

(1 msec)

5G in a Nutshell

13

5G use case 1: WTTx

WTTx = Wireless To The Everything WTTx is a new 5G-based broadband access solution, which uses wireless to provide fiber-like broadband access for household. WTTx benefits:

• High speed internet access with superior

performance

• Lower investment cost compared to others wired

access

• Fast deployment
• Easy maintenance

Deployed on high-band (28GHz) by some operators in late 2018 e.g. Verizon and Telefonica

14

5G use case 2: Automation factory

5G technology provides low latency and high reliability connectivity for manufacturing. These are requirements that manufacturers currently rely

• n fixed-line networks.

The mobile 5G technology will allow for higher flexibility, lower cost and shorter lead times for factory floor production reconfiguration and layout changes. Automation factory benefits: 1. Reduce system setup time 2. Increase productivity 3. Minimize machine downtime in case of any changes

5G use case 2: Automation factory

5G technology provides low latency and high reliability connectivity for manufacturing. These are requirements that manufacturers currently rely

• n fixed-line networks.

The mobile 5G technology will allow for higher flexibility, lower cost and shorter lead times for factory floor production reconfiguration and layout changes. Automation factory benefits: 1. Reduce system setup time 2. Increase productivity 3. Minimize machine downtime in case of any changes

15

16 Autonomous driving means the self-driving of a vehicle to a specific target in real traffic without the intervention of a human driver. Autonomous driving benefits: 1. Reduce accidents 2. Reduce traffic congestion/Lower fuel consumption 3. Reduce CO2 emission 4. More efficient parking

5G use case 3: Autonomous driving

Mainstream adoption More than 10 years

17

Potential frequencies to be allocated in 2020 700MHz 1800Mhz 2600MHz 26GHZ

NBTC’s draft plan to auction 5G spectrum

900MHz License 2x10MHz Until 2031 deployed for 4G/3G/2G 1800MHz License 2x20MHz Until 2033 deployed for 4G 2100MHz License 2x15MHz Until 2027 deployed for 4G/3G 2100MHz Partnership with TOT 2x15MHz Until 2025 Deployed for 4G/3G

Largest bandwidth of 120MHz (2x60MHz) under operation

700MHz License 2x10MHz *Starting from October2020

New

= 5MHz block

Draft timeline for license auction

Draft of information memorandum by NBTC Public hearing for related stakeholders Publication of the regulation regarding license in the Royal Gazatte

Source: NBTC

Auction invitation Auction date License granting 11-Nov-19 Mar-20 16-Feb-20 13-Nov-19

• 12-Dec-19

27-Dec-19 2-Jan-20

5G Development

AIS’s spectrum portfolio

18

APPENDIX

19

Impact from TOT partnership

Tower agreement: With dispute of tower ownership settled, AIS agreed to rent towers from TOT who will rent

the space and use maintenance services from AWN for 10 years, effective from 1-Jan-19 .The agreement effectively incurred a net cost of approximately Bt200mn/month in 2019 vs Bt300m previously.

Ne

2G equipment: AIS agreed to settle rental dispute and to purchase 2G equipment from TOT for Bt244mn,

effectively discontinues the rent from Sep-19 onward. (Since Jul-16, AWN has paid for the use of 2G equipment at Bt167mn/month.)

OLD New OLD New

Net impact of cost-saving from new TOT agreement for 1H19: Bt600mn Net impact of cost-saving from new TOT agreement for 3Q19: Bt300mn Net impact of cost-saving from 2G equipment buyback for 3Q19: Bt500mn

Net cost = Bt600mn per quarter (effective since Jan-19)

Effectively discontinued the rent from 3Q19 onward

AIS recognized the TOT tower rental under ‘Network operating expenses’ Net cost = Bt900mn per quarter. Revenue from space rental and maintenance services is booked under ‘IC and TOT partnership revenue’

Net basis Gross basis

AIS recognized the 2G equipment rental under ‘Network operating expenses’ Net cost = Bt500mn per quarter. Cost of tower rental is presented under ‘Network OPEX and TOT partnership cost’.

Booked in 3Q19

FY19 guidance: Stable from last year

59,159 799 2,363 211 5,137 1,674 55,721

20

Profit rose from both revenue and cost improvement

EBITDA

17.8 19.1 21.1 3Q18 2Q19 3Q19 55.7 59.1 9M18 9M19 +19% YoY (+15% YoY)* +11% QoQ (+4.6% QoQ)* +6.2% YoY

(+6.2% YoY)*

EBITDA 9M18 Cost of service SGA Net sale Others EBITDA 9M19 Core service revenue

Net profit

6.8 7.7 8.7 3Q18 2Q19 3Q19 22.8 24.0 9M18 9M19 +28% YoY (+20% YoY)* +12% QoQ (+0.7% QoQ)* +5.1% YoY

(+5.2% YoY)*

(Bt bn) (Bt bn) (Bt mn)

• 9M19 net profit increased by 5.1% due to growth in core

service revenue and cost saving from TOT settlement

EBITDA margin

42.3% 42.8% 46.5% 44.5% 44.2% 45.0% 44.2% 45.4% 44.6% 44.3%

3Q18 2Q19 3Q19 9M18 9M19

• Less marketing expense and rental saving on TOT settlement stimulate double-digit growth on EBITDA

*Show performance after normalizing Bt479mn (before tax) of TOT partnership in 3Q19

Reported Normalized (20.7)* (59.3)* (59,316)* (8.3)* (24.2)*

21

3Q19 & 9M19 Financial Highlights (Pre-TFRS15)

This table is based on pre-TFRS 15 Bt mn 3Q18 2Q19 3Q19 %YoY %QoQ 9M18 9M19 %YoY Mobile revenue

30,895 32,911 32,880 ▲6.4% flat 93,358 97,346 ▲4.3%

FBB revenue

1,117 1,380 1,475 ▲32% ▲6.9% 3,224 4,143 ▲29%

Other revenues

1,122 1,103 1,172 ▲4.4% ▲6.3% 3,163 3,393 ▲7.3%

Core service revenue

33,134 35,394 35,527 ▲7.2% ▲0.4% 99,745 104,883 ▲5.2%

IC and TOT partnership

3,111 2,841 4,278 ▲38% ▲51% 7,374 10,113 ▲37%

Service revenue

36,245 38,235 39,804 ▲9.8% ▲4.1% 107,120 114,996 ▲7.4%

SIM and device sales

5,865 6,453 5,652 ▼3.6% ▼12% 18,152 18,973 ▲4.5%

Total revenues

42,110 44,688 45,457 ▲7.9% ▲1.7% 125,271 133,969 ▲6.9%

Cost of service

(19,835) (20,170) (20,748) ▲4.6% ▲2.9% (56,317) (60,735) ▲7.8%

SG&A

(6,794) (7,706) (7,227) ▲6.4% ▼6.2% (19,327) (21,719) ▲12%

EBITDA*

17,817 19,117 21,135 ▲19% ▲11% 55,721 59,159 ▲6.2%

EBIT*

9,261 10,059 11,565 ▲25% ▲15% 30,761 31,687 ▲3.0%

NPAT*

6,800 7,725 8,679 ▲28% ▲12% 22,843 24,019 ▲5.1%

Sales margin

• 5.5%
• 4.0%
• 4.2%

▲130bps ▼20bps

• 3.2%
• 4.1%

▼100bps

EBITDA margin*

43% 43% 47% ▲420bps ▲370bps 45% 44% ▼30bps

EBIT margin*

22% 23% 25% ▲340bps ▲290bps 25% 24% ▼90bps

NPAT margin*

16% 17% 19% ▲290bps ▲180bps 18% 18% ▼30bps *Included one-time expense of Bt479mn (before tax) for TOT Partnership in 3Q19. See page 7 for normalization

22

3Q19 & 9M19 Financial Highlights (Post-TFRS15)

Post-TFRS 15 Bt mn 1Q19 2Q19 3Q19 %QoQ 9M19 Mobile revenue

30,678 32,042 31,851 ▼0.6% 94,571

FBB revenue

1,288 1,380 1,409 ▲2.1% 4,078

Other revenues

1,078 1,083 1,201 ▲11% 3,362

Core service revenue

33,044 34,505 34,461 flat 102,011

IC and TOT partnership

2,995 2,841 4,278 ▲51% 10,113

Service revenue

36,039 37,346 38,739 ▲3.7% 112,124

SIM and device sales

7,222 6,736 5,994 ▼11% 19,952

Total revenue

43,262 44,081 44,733 ▲1.5% 132,076

Cost of service

(19,817) (20,170) (20,748) ▲2.9% (60,735)

SG&A

(6,262) (7,047) (6,331) ▼10% (19,641)

EBITDA

18,868 19,169 21,307 ▲11% 59,344

EBIT

10,021 10,118 11,734 ▲17% 31,873

NPAT

7,570 7,754 8,800 ▲13% 24,125

Sales margin

0.9% 0.4% 1.8% ▲140bps

• 1.0%

EBITDA margin

43.6% 44% 48% ▲410bps 45%

EBIT margin

23.2% 23% 26% ▲330bps 24%

NPAT margin

17.5% 18% 20% ▲210bps 18%

Mobile revenue Fixed broadband revenue Other revenues IC and equipment rental Net Sales & margin

(Bt bn) (Bt bn) (Bt bn) (Bt bn) (Bt mn)

% sales margin

23

• DC & Cloud business were the main

growth driver with higher capability from CSL acquisition

• Increased YoY and QoQ due to TOT

settlement

• Continued handset campaigns
• Expanded subscriber base to 937k,

adding 81.6k in the quarter

• YoY growth driven by improvement
• f data pricing

30.9 32.9 32.9 93.4 97.3 1.1 1.4 1.5 3.2 4.1 1.1 1.1 1.2 3.2 3.4 9M18 9M19 3Q18 2Q19 3Q19 9M18 9M19 3.1 2.8 4.3 7.4 10.1

• 5.5% -4.0% -4.2%
• 3.2% -4.1%

+4.4% YoY +6.3% QoQ +32% YoY +6.9% QoQ +6.4% YoY flat QoQ +4.3% YoY +29% YoY

3Q19 & 9M19 Revenue Breakdown

3Q18 2Q19 3Q19 9M18 9M19

+7.3% YoY

3Q18 2Q19 3Q19 9M18 9M19

+38% YoY +51% QoQ +37% YoY

3Q18 2Q19 3Q19 9M18 9M19

• 324 -256 -236
• 573 -784

3Q18 2Q19 3Q19

Regulatory fee D&A Network OPEX Marketing expense Admin & others

• Increased following higher service

revenue and maintained at 4.1% of core service revenue

• Continued investment in 4G

network, FBB, and 1800MHz spectrum license

• 9M19 network OPEX increase 13%

YoY from 4G expansion and TOT partnership cost

• QoQ reduction mainly resulted from an increase

in brand campaign in 2Q19

• 9M19 increased from investment for brand

perception and handset subsidies

(Bt bn) (Bt bn) (Bt bn)

• The drop QoQ due to one-time provision for legal

severance in 2Q19. However, YoY increase came from interest charge on settlement of 2G equipment with TOT

• 9M19 increase resulted from legal severance

recognition in 2Q19

(Bt bn) (Bt bn)

+2.6% YoY +0.4% QoQ +2.7% YoY +1.3% QoQ

% to core service revenue % to total revenue

24

+12% YoY +5.8% QoQ

1.4 1.5 1.5 3Q18 2Q19 3Q19 4.3 4.3 9M18 9M19

+0.7% YoY

8.4 8.9 9.4 3Q18 2Q19 3Q19 24.5 27.0 9M18 9M19

+10% YoY

7.2 7.3 7.4 3Q18 2Q19 3Q19 19.6 22.1 9M18 9M19

+13% YoY

2.4 2.7 2.6 3Q18 2Q19 3Q19 6.8 7.9 9M18 9M19

+5.9% YoY

• 5.3% QoQ

+15% YoY

4.4 5.0 4.7 3Q18 2Q19 3Q19 12.5 13.8 9M18 9M19

+6.6% YoY

• 6.7% QoQ

+11% YoY

4.3% 4.1% 4.1% 4.3% 4.1% 5.8% 6.1% 5.7% 5.5% 5.9%

3Q19 & 9M19 Cost Breakdown

25

Impact from TFRS 15 adoption

Subsidy Contract Type I

Pre-TFRS 15 Post-TFRS 15

Service revenue Device sale Subsidy

(under marketing expense)

Service revenue Device cost Device sale Device cost Subsidy

(under marketing expense)

Contract asset Amortized against service revenue over contract period

Subsidy Contract Type II

Pre-TFRS 15 Post-TFRS 15

Service revenue Service revenue Device cost Device sale Device cost Device sale Re-allocate by fair values Subsidies under negative device margin

• Subsidy booked in marketing expense is capitalized as contract

asset and amortized against service revenue over the contract

• Results in lower service revenue and lower marketing expense
• Subsidy booked as negative device margin requires a re-

allocate between service and device revenues by fair values

• Results in lower service revenue and higher device sale

Net impact between Pre-TFRS 15 and Post-TFRS 15 for 1H19

Service revenue

• 1,807mn

Device sale +638mn SG&A

• 1,149mn

Contract asset +1,675mn DTA

• 335mn

Retained earnings +1,340mn Cash flow No impact Profit and Loss Balance Sheet Cash Flow

26

Impact from TFRS 16

Net impact between Pre-TFRS 16 and Post-TFRS 16 in 2020

Profit and Loss Balance Sheet Cash Flow

New account standard to replace TAS17, affective on 1 January 2020

• AIS’s major operating leases to be transferred: tower and site rental, long term roaming

contract with TOT on 2100MHz, office and shop building and transmissions Previous standard (TAS 17) New standard (TFRS 16)

Operating lease Rental expense Cash flow from operating activities (Rental expense) Cash flow from financing activities (Finance lease payment) Finance lease Assets: Right of use (ROU) Liabilities: Lease liability Accounting transactions incurred

• Depreciation expense
• Interest expense
• Deferred tax

Higher EBITDA (decrease in rental

expense and increase in depreciation)

Lower net profit in the beginning

(high interest expense) Increase in cash flow from

• perating activities

Decrease in cash flow from financing activities

Higher Assets Higher liabilities *No impact

27

FY19 Pre-TFRS 15 Guidance (maintained)

FY19 guided items Guidance Rationale Core service revenue Mid-single digit growth

• Mobile: stay competitive in maintaining business scale

driven by 4G and penetration in growing segments

• FBB: deploy FMC (Fixed- Mobile Convergence) targeting

1mn subscribers milestone

• Enterprise: gain share in mobile airtime and EDS while

growing in Cloud/DC/ICT managed services EBITDA margin Stable from last year (43.4% in FY18)

• Allocate sufficient capital to retain and expand scale in

respective businesses

• Optimize OPEX, offset with cost to support network growth

in all businesses Budgeted CAPEX (excludes spectrum payment) Bt20-25bn, of which Bt4-5bn allocated for FBB

• Focus on 4G capacity expansion incorporating 5G-

compatible architecture

• Expand last miles to serve 1mn FBB customers

Dividend policy Minimum 70% payout ratio

• Preserve financial health and flexibility for future growth

6 10 28 33 32 48 41 20

2011 2012 2013 2014 2015 2016 2017 2018

28

Historical profitability and CAPEX trend

36% 32% 32% 33% 33% 32% 36% 36% 45% 42% 42% 44% 46% 40% 45% 43%

2011 2012 2013 2014 2015 2016 2017 2018

Industry AIS 14% 13% 9% 13% 14% 9% 8% 6% 18% 24% 24% 24% 25% 20% 19% 18%

2011 2012 2013 2014 2015 2016 2017 2018

Industry AIS

EBITDA margin NPAT margin CAPEX

AIS’ CAPEX (Bt bn) AIS’ CAPEX to service revenue ex. IC Source: company data

6% 9% 24% 28% 27% 41% 32% 15%

Mobile industry stat

44 39 41 40 41 28 25 24 23 21 24 19 25 27 29

2014 2015 2016 2017 2018

29 Total subscriber (mn) Industry Postpaid-Prepaid mix

96 83 90 * In 2015, sub base of the industry was affected by the adjustment of prepaid sub reporting to reflect only active ones. The decrease in sub base also caused by NBTC’s announcement requiring prepaid sub to register their SIMs. The SIMs that failed to register by the deadline were terminated.

*

90 92

254 251 258 254 263 220 220 237 243 253 204 213 208 204 212

4Q15 4Q16 4Q17 4Q18 2Q19

14% 17% 19% 22% 24% 86% 83% 81% 78% 76%

2014 2015 2016 2017 2018

Postpaid Prepaid

49% 23% 28% 45% 23% 32%

TRUE DTAC TRUE DTAC

92 mn Bt68bn Revenue market share Subscriber market share

DTAC TRUE DTAC

as of 2Q19

TRUE

Blended ARPU (Bt) Total mobile revenue (Bt bn)

118 121 123 129 133 68 66 65 65 63

38 45 58 66 73 FY14 FY15 FY16 FY17 FY18 243 255 TRUE DTAC 262 231 224

as of 2Q19

571 564 571 569 529 537 531 176 174 182 179 174 182 179 255 253 263 263 246 256 254

4Q18 1Q19 2Q19 3Q19 1Q19 (TFRS15) 2Q19 (TFRS15) 3Q19 (TFRS15)

Mobile: Data usage grew more reasonably

ARPU (Bt/sub/month)

• Mobile subscribers was at 41.6mn, slightly

increased with net add of 94k QoQ

• Postpaid subscribers grew 208k QoQ,

underpinned by prepaid-to-postpaid conversion and attractive handset campaigns.

• Prepaid subscribers decreased 115k QoQ,

partly from postpaid migration.

postpaid prepaid

Subscribers (mn) Net addition (‘000)

192 175 354 250 208 360 347

• 32
• 276
• 115

3Q18 4Q18 1Q19 2Q19 3Q19 8.0 8.2 8.5 8.8 9.0 32.6 33.0 33.0 32.7 32.6

postpaid prepaid blended

12.7 14.0 14.4 15.1 16.2 9.2 9.8 10.3 10.1 10.5 10.1 10.9 11.4 11.5 12.1

3Q18 4Q18 1Q19 2Q19 3Q19

• Blended ARPU maintained at Bt263, resulted

mostly from corporate subscribers

• Blended VOU increased to 12.1GB but the rate of

growth was more modest compared to the hype from last year unlimited data plan. VOU (GB/data sub/month) 30

20% 20% 21% 21%

% to total sub

22%

Mobile postpaid package: Gearing toward full-speed plans

31

Monthly Fee (Bt) Total internet Throttled speed Call all networks (mins) Enjoy Free 299 1.5GB 128kbps 100 399 5GB 384kbps 150 499 10GB 200 599 16GB 300 699 20GB 300 899 30GB 400 1,099

Unlimited

• 650

1,299 850 1,599 1,200 1,999 2,000

• Attract new data users and encourage higher

ARPU subscriptions through premium VDO contents

• Serve high-end heavy data users with real

unlimited max speed experience

Updated: Nov-19

Full 4G speed

3 months 1 month 3 months 12 months

Data add-on package

Volume Day (s) 1 day 3 days 7 days 30 days

100 MB 9 Bt 200 MB 15 Bt 600 MB 20 Bt 1 GB 35 Bt 65 Bt 99 Bt 199 Bt 1.5 GB 39 Bt 69 Bt 109 Bt 229 Bt 2 GB 45 Bt 75 Bt 115 Bt 239 Bt 3 GB 49 Bt 79 Bt 119 Bt 399 Bt 4 GB 69 Bt 99 Bt 135 Bt 450 Bt 5 GB 75 Bt 105 Bt 150 Bt 488 Bt 8 GB 89 TBt 149 Bt 199 Bt 599 Bt

NEXT G Flexi Speed: The adjustable data package to match your speed needs

Monthly Fee (Bt) Internet 4G/3G

(GB)

Call all networks

(mins) Speed Adjustment

450 20 200 Full Speed 8 Mbps 4 Mbps 2 Mbps 550 40 750 60

Unlimited

First Activation Bt50 Refill at least Bt150 (12m) 750MB/2Mbps 1GB 30d Data 2GB/7d

32 Main package

THE ONE SIM

Data add-on package

Period Data Price (Bt) Daily 24h 2GB 35 24h 8GB + AIS Wi-Fi 89 Weekly 5d 2GB 99 7d 2.5GB / 512kbps 89 7d Unlimited (6am-6pm) 99 7d 2.5GB / 1Mbps 120 7d 8GB + AIS Wi-Fi 199 Monthly 30d 1GB 199 30d Unlimited (6am-6pm) 299

Add-on package for entertainment

• AIS PLAY MOVIES •

Bt199/m

• Entertainment Non-Stop
• Bt19/d, 512kbps
• r
• r
• AIS PLAY Maomao •

Bt59/30d

First Activation Bt50 Refill at least Bt150 (12m) Data 2GB/7d 1Mbps/30d 30d

Call rate: Bt0.014/s - Bt1 at first minute

SUPER SOCIAL SIM

Mobile: Prepaid package

Updated: Nov-19

Prepaid: SIM2Fly

Required Top-up (Bt) Bundle 399 899 2,799

• Offer various segmented SIMs to cater different needs
• Leverage bundling services to encourage recurring top-up

*Voice call: Bt6/minute for all packages

6GB of data for 8 days in Asia & Australia 6GB of data for 15 days globally 15GB of data for 1 year globally

33

Fee (Bt) Data (GB)

Call (mins)

Others Data (GB)

Call (mins)

Others Data (GB)

Call (mins)

Others 299 1.5 100 1.5 100 1.5 100 399 5 150 5 150 5 150 499 10 200 10 200 10 200 599 16 300 16 300 40 1000 699 20 300 20 300 20 300 899 30 400 30 400 30 400 1,099 Unlimited 700 Unlimited 700 Unlimited 700 1,899 Unlimited 1,200 Unlimited 2,000 1,999 Unlimited 2,000 2,199 Unlimited Unlimited

Source: operator’s website, as of Nov 2019

Segment

SIM (Bt)

Data (Bt/mb)

Call (Bt/min) SIM (Bt)

Data (Bt/mb)

Call (Bt/min) SIM (Bt)

Data (Bt/mb)

Call (Bt/min) Social SIM Bt50 Bt1.5/mb 1st min Bt1 + Bt0.84 Bt49 Bt1.5/mb Bt0.90 Bt49 Bt1.99/mb

1st min Bt0.99 + Bt0.55

Unlimited 7 social apps, Bt15 credit Unlimited 14 social apps, No credit Unlimited 9 social apps, Bt15 credit

• Postpaid
• Prepaid

Next G Flexi Speed

Fee (Bt) Data (GB) Call (mins) Details

450 20 200

Bt450 pack is allowed for new/convert sub.

550 40 200 749 60 200 Super Khum

Fee (Bt) Data (GB) Call (mins) Details

549 40 600

Allowed for new

• sub. only

749 60 1,000 949 80 1,200 Jai Laew Job&Smart Net

Fee (Bt) Data (GB) Call (mins) Details

399 30 300

Only converted to DTAC sub are allowed

450 40 450 599 40 1,000 Unlimited Prepaid Promotion Baht/Speed Call Condition Wifi Period

AIS Bt200/10Mbps 1st 15min free + Bt0.99/min. New SIM/MNP

• 1-30 Nov. 2019

TRUE Bt200/10Mbps 15min per call (Auto cut off) New SIM

• 1-30 Nov. 2019

DTAC Bt200/10Mbps 1st 15min free + Bt0.99/min. New SIM/MNP Free 30 days 1-30 Nov. 2019

Mobile: Market pricing

34

10 20 30 40 50 60 70 80 90 100 10 20 30 40 50 60

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

CAPEX and technology cycle

4G Coverage

Bt bn

5G investment

#MHz

3G Coverage 4G Capacity 3G Capacity

2.6GHz 3.5GHz 26-28GHz

• Ensure spectrum leadership and efficient investment

14% 17% 18% 17% 18%

2000-2005 2005-2010 2010-2015 2015-2020 2020-2025

GSMA’s Global Mobile CAPEX

(excl. spectrum) as % of mobile revenue

Whether 2G, 3G or 4G, the industry has kept investing 16–18% of its revenue in mobile networks – a trend expected to continue in the 5G era.

Dependent on 5G use cases and expect to spread out

5G: More spreading investment outlook

35

5G Standardization – Timeline, key date and players

2015 2016 2017 2018 2019 2020 ITU 3GPP

Vision Requirements Workshop Proposals Release 15 Release 16

WRC-15 WRC-19 Commercial Specification

Define 5G architectures Define eMBB spec. Focus more on uRLLC and eMTC

• 5G Spectrum at

World Radio communication Conferences (WRC) 2015 and 2019

• Standards complete

2019

• Commercial scaled

Deployments 2020

• nwards

36

Global pre-commercial/commercial 5G launch plan

37

By mid Jan 2019,

201 operators in 83 countries investing in 5G,

including tests, trials, plan, pilot deployment and commercial launch.

5G deployment worldwide

38 Samsung 5G prototype phone in CES 2019

5G Devices

AT&T announces 3 mobile 5G devices

Netgear 5G WiFi hotspot Samsung 5G on mmWave & sub-6 GHz (2H 2019)

Verizon 5G upgradable phone and FWA devices

Moto Z3 5G upgradable phone Verizon 5G Home CPE since 1 Oct 2018

Sprint & LG 5G phone by 1H2019 Xiaomi Mi Mix 3 5G phone by mid

• f 2019

39

Existing 4G Topology 5G NSA Topology (NSA: Non-StandAlone)

HSS MME

Internet

IMS

SG W/ PG W

GW C GW U

eNB Antenna

4G

RRU CPRI BBU IPRAN ACCESS (10G) IPRAN AGGREGATE

Radio Transport Network 4G Core EPC

HSS MME

Internet

IMS

SG W/ PG W

GW C GW U

Radio Transport Network 4G Core EPC

gNB

5G

AAU eCPRI CU/DU

IPRAN ACCESS(10G)

WDM Access IPRAN ACCESS(100G) Split Chain

IPRAN ACCESS(10G)

Existing Upgrade New IPRAN AGGREGAT E

40

Network infrastructure preparation for 5G

• Tested & Deploy NFV

and CUPS network solutions

AIS core network is upgradable to support 5G

• Also including IPRAN

enhancement to support higher bandwidth

5G new base stations can be interworking with existing network

• 2.6GHz, 3.5GHz, 26-

28GHz

New Frequency spectrum is required to support 5G

43% 29% 18% 10%

41

Fixed broadband industry stat

Revenue market share Subscriber market share ARPU (Bt) Total broadband revenue (Bt bn) Total subscriber (mn)

38% 33% 20% 9%

Bt14bn 9.5mn

TRUE 3BB TOT TRUE 3BB TOT

as of 2Q19

0.0 0.3 0.5 0.7 2.4 2.8 3.2 3.5 2.0 2.3 2.7 2.9 1.8 1.7 1.8 2.0 2015 2016 2017 2018 TRUE 3BB TOT

6.2 7.2 8.2 9.2

0.8 3.1 4.4 21.0 23.0 25.7 14.5 16.4 16.9 10.1 9.9 10.3 2016 2017 2018 TRUE 3BB TOT

47 53 57

510 635 574 558 591 615 577 552 648 646 651 645

4Q16 4Q17 4Q18 2Q19

TRUE 3BB

as of 2Q19

AIS Fibre: Competitive price plans targeting pure internet, game and FMC customers

42

Updated: Nov-19

Home Broadband

• Basic pure internet pack for

early broadband adopters including ADSL users

• Offer FMC including fibre

broadband, mobile data, premium content, and Super WiFi

Power4 MAXX eSports

• Target gamers by

separating network between Gaming & Internet

• Offer a high-speed fibre

internet experience in every corner of a home

SUPER MESH WIFI

43

FBB: Market pricing

Price Data speed

Mobile Call/Data

Others 499 50/20 Mbps

• 599

100/100 Mbps

• 699

50/20 Mbps 5GB AIS Play 6m 790 100/100 Mbps

• eSport package

799 100/50 Mbps 10GB AIS Play 6m 799 200/100 Mbps

• 890

200/200 Mbps

• eSport package

990 300/300 Mbps

• eSport package

999 300/100 Mbps 15GB AIS Play 6m 999 1Gbps/100Mbps

• 1,099

1Gbps/100Mbps

• 1,299

300/100 Mbps 100min, 30GB

AIS Play 6m, Netflix 3m

Price Data speed 590 100/100 Mbps 700 200/200 Mbps 900 300/300 Mbps 1,200 500/500 Mbps 1,590 1Gbps/500Mbps Price Data speed Mobile Call/Data Others 599 50/20 Mbps 5 GB

• 799

100/50 Mbps 10 GB Enjoy HD 899 200/50 Mbps 60min, 10GB TrueID TV 899 200/200 Mbps 10GB Game pack 899 1Gbps/100Mbps

• 999

200/50 Mbps 300min, 15G

• 999

300/300 Mbps 10GB Game pack 999 1Gbps/100Mbps 5 GB TrueID 12m 1,599 1Gbps/100Mbps 300min, 20GB TrueID12m 1,999 1Gbps/100Mbps

• Gold HD

2,199 200/100 Mbps

• Platinum HD

2,399 1Gbps/100Mbps

• Platinum HD

FMC FMC FMC

Source: operator’s website, as of Nov 2019

FMC Price Data speed Others 590 100/100 Mbps Mono Max 30d 700 200/200 Mbps Mono Max 30d 750 200/200Mbps+200/200Mbps (Mesh Wifi) 900 300/300 Mbps Mono Max 30d 1,200 500/500 Mbps Mono Max 30d 1,590 1Gbps/100Mbps Mono Max 30d 2,999 1Gbps/500Mbps Mono Max 30d

AIS Play, Netflix 3m

Digital content: More varieties and exclusivities

Introduced content packages to attract customers with different preferences e.g. sports, family, movies at more affordable prices on both AIS PLAY and AIS PLAYBOX.

Mobile Fixed broadband

Ultimate entertainment in all forms Bt599/month Ultimate movies & series Bt399month World class cartoons Bt299month Thrilling sports matches Bt199month

Access to all exclusive content

44

Updated: Nov-19

PLAY PREMIUM

HBO, CINEMAX, WARNER, BLUEANT

PLAY MOVIES

WARNER, BLUEANT

PLAY SERIES Bt299/month Bt199/month Free 1 month Bt99month or Bt5/day

HEADLINE NEWS, CNN

PLAY NEWS Bt99month or Bt5/day

45

• Awarded

“World’ Strongest Telecoms Brand” by Brand Finance with a brand strength index (BSI) score of 90.0 out of 100, highest in 300 most valuable telecoms brands

• Received “2018 Most engaged brands

in Thailand” from Twitter

Continued highly-recognized in brand and customer engagement

• Best Brand Performance on Social Media,

Social Media Platform and Media Campaigns by Thailand Zocial Awards 2019 Most retweeted hashtags in 2018 Engaged with digital users

• n social media

Mark #1 in brand leadership

Ranked World’s Strongest Telecoms Brand

• The only brand in the industry globally to post

a AAA+ rating

• Marketing investment
• Stakeholder equity
• Business performance

Investment Equity Performance

• Measured by the

efficacy of a brand’s performance:

Distribution Channel

AIS Branded Shop (run by both AIS and partners) Telewiz: exclusive branded shop by partner AIS Buddy Exclusive Partner Local small retailers Electronic Distribution Channel Retailers 150+ Shops 430+ Shops 1,100+ Shops 19K+ Shops 3,000+ Shops 400K + Points 650+ Shops 46

Disclaimers Contact us IR website: http://investor.ais.co.th Email: investor@ais.co.th Tel: +662 029 5014

Some statements made in this material are forward-looking statements with the relevant assumptions, which are subject to various risks and uncertainties. These include statements with respect to our corporate plans, strategies and beliefs and other statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “intend”, “estimate”, “continue” “plan” or other similar words. The statements are based on our management’s assumptions and beliefs in light of the information currently available to us. These assumptions involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please note that the company and executives/staff do not control and cannot guarantee the relevance, timeliness, or accuracy of these statements.